Unitary enterprise

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A unitary enterprise is a government-owned corporation in Russia and some other post-Soviet states. Unitary enterprises are business entities that have no ownership rights to the assets that they use in their operations. This form is possible only for state and municipal enterprises, which respectively operate state or municipal property. The owners of the property of a unitary enterprise have no responsibility for its operation and vice versa.


The legal status of unitary enterprises in Russia is defined in Federal Law No. 161-FZ "On State and Municipal Unitary Enterprises", which was approved by the State Duma on October 11, 2002 and signed by President Putin on November 14, 2002.

The assets of unitary enterprises belong to the federal government, a Russian region, or a municipality. A unitary enterprise holds assets under economic management (for both state and municipal unitary enterprises) or operative management (for state unitary enterprises only), and such assets may not be distributed among the participants, nor otherwise divided. A unitary enterprise is independent in economic issues and obliged only to give its profits to the state. Unitary enterprises have no right to set up subsidiaries, but, with the owner's consent, can open branches and representation offices.

Though unitary enterprises are owned by the government they work on the basis of commercial accounts and commercial legislation. They are under ministerial responsibility but are off budget. They are auxiliary to a ministry's activity, such as a printing house under the Ministry of Education or a production facility for police equipment under the Ministry of Internal Affairs. State unitary enterprises have a distinct legal status, different from regular market sector corporations.


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